Ministry of Land, Infrastructure and Transport temporarily suspends regulation of stepping stone loans amid market turmoil

The government has decided to temporarily suspend measures to reduce the limit on stepping-stone loans, a policy loan for buying homes for ordinary people.

The Ministry of Land, Infrastructure and Transport, the Korea Housing & Urban Guarantee Corporation, and HUG said they have asked banks that entrust stepping stone loans to temporarily suspend regulations, including reducing the limit on stepping stone loans, which were scheduled to take effect on the 21st.

In this regard, an official from the Ministry of Land, Infrastructure and Transport explained that it was suspended for now because of the heavy confusion at the site, and that further measures are under discussion.

It seems that end users who have to take out balance loans ahead of moving into apartments have decided to suspend related measures as they complain of damage.

Stepping stone loans are policy financial products that can be borrowed up to 250 million won for homes with a housing value of 500 million won or less, and can be borrowed up to 70% of the mortgage ratio within the limit.

However, the ministry recently asked banks to cooperate with measures to reduce the cap on stepping-stone loans through HUG, which manages the housing fund, as policy loans continued to rise.